Even the long-elusive private investments showed early signs of a pick-up, at least in some key sectors power, metals and a few other areas where the production-linked incentives are available.

Weathering the geopolitical turbulence, India’s economy was looking for a much-awaited smart recovery in March-April, many high-frequency indicators suggest (see chart). The uptrend, that might have started in February, indeed solidified in March; the tempo was somewhat sustained in April too.

Even the long-elusive private investments showed early signs of a pick-up, at least in some key sectors power, metals and a few other areas where the production-linked incentives are available.

Proof of a consumption growth was the upticks in air passenger traffic, two-wheeler sales, port cargo, non-food credit, rail freight, highway toll collections and power consumption. Before being impacted by the hike in retail prices, auto fuel consumption also was growing at a steady pace.

Increase in non-oil, non-gold imports and a rise in new capital goods orders signal robust investment activity, mostly in the government sector but also aided by a nascent revival in the private sector.

The eight infrastructure sectors registered a strong sequential growth of 14.4% in March. While manufacturing PMI remained in the expansion zone in the month, the services index scaled touched three-month high in March.

But sharply elevated global prices of key commodities including oil, gas and metals might have started impeding the momentum by putting enormous pressure on corporate profitability, along with an escalating power crisis.

Elevated broad-based inflation, continued geopolitical uncertainties and the end of easy money are the immediate threats to the revival. Tackling these will determine if the long and tedious phase of tepid economic growth and restrained consumption can be got over soon.

https://www.financialexpress.com/economy/is-india-back-in-action/2509911/